Thank you to all the committee members, sponsors, exhibitors, presenters, attendees, and media coverage of the York Ag Expo last week! Great to see so many turn out for the educational sessions as well!
Farm Bill: I was extra pleased with the excellent questions and discussion with the afternoon educational sessions at the York Ag Expo. The following are the major changes that Dr. Brad Lubben, Extension Farm Policy Specialist, shared during the Farm Bill
presentation. Farmers will have the opportunity to make a new election for either ARC-CO or PLC for the years 2019-2020 (a two year decision), after which the decision will be a yearly one (beginning in 2021) until the end of the farm bill period. There’s more changes to the ARC program than PLC. For ARC, the primary source of yield data will most likely be RMA crop insurance data instead of NASS survey data. The 25% factor used to establish ARC-CO coverage by irrigated or non-irrigated practice is no longer in effect. Instead, a farmer can make a request to the FSA committee if not less than 5% of the acreage was irrigated or not less than 5% was non-irrigated during the 2014-2018 crop years. Coverage is now tied to a physical county regardless of administrative county. The plug yield in ARC-CO increased from 70% to 80% of the transitional yield. There will also be a trend yield adjustment similar to the Federal crop insurance trend-adjusted yield endorsement. When Brad showed what this looked like if applied to the previous farm bill, it increased the bu/ac in all the examples he showed. Thus, he speculates it should improve the ARC-CO benchmark. Regarding PLC, producers will have the opportunity to consider updating yields on farms. There’s a specific equation that will be used and because it’s focused more on the 2008-2012 period to help those farms most effected by drought, it may not provide a benefit to all farms. It would still be worth working through the equation just to make sure for your individual farms. The other change to PLC is the equation for the effective reference price. In 2014, several of us in Extension worked individually with you to help you through these decisions using decision support tools. Money was not provided in this farm bill to support the computer tools so we’re still waiting to see if they will be developed. We’re assuming they will be. Yet the decisions this time may be more straightforward with making a decision for the first two years followed by annually vs. the life of the farm bill like what happened in 2014. All resources and information can be found at http://farmbill.unl.edu. Regarding ARC vs. PLC decisions, Brad shared the following points:
- Under stable, lower price levels, PLC support will kick in before ARC support for downward price movement.
- Under modestly increasing price levels, ARC and PLC support may quickly disappear.
- Under substantially higher prices, moving average price in ARC benchmark and moving average price in PLC effective reference price could rachet up support to near equivalent levels.
Survey: Every year in Extension we write annual reports to justify the work we accomplished during the year. Last week I shared a survey link to provide me feedback regarding 2018 efforts. Thank you for those who have responded; I appreciate it!!! The survey truly is anonymous. For those who haven’t responded, I would greatly appreciate your feedback on this short survey at: https://app2.sli.do/event/q2p1sedv/polls. A year ago I changed the way I did my email list and news columns. My hope is that the format is more beneficial for us all in spite of the extra time it takes me each week. I’m genuinely open to and desirous of your feedback. Also, if you’re reading this and would like to be added to my email list, please email me at email@example.com and I will add you.
Crop Production Clinics and Nebraska Crop Management Conference: Thank you to all who requested via surveys, emails, or phone calls in 2018 that you wanted to see the Crop Production Clinic back in the area! You were heard and one will be held in York at the Holthus Convention Center on January 17th! You can see the full schedule at http://agronomy.unl.edu/cpc. The Nebraska Crop Management Conference in Kearney on Jan. 28-29 has the same topics as Crop Production Clinics with additional topics and out of state speakers. You can view the registration for that conference at: https://agronomy.unl.edu/NCMC. While I realize many of you attend CPC for specific reasons, there is an opportunity this year to participate in a university research study and be paid for your time. Simanti Banerjee, an assistant professor in the Department of Agricultural Economics, is studying producer behaviors in response to farm bill programs. The study will take up to two hours. Average earnings from participating in the study are expected to be up to $100, depending on your decisions and those of other participants. All information collected is confidential and your responses are anonymous and will not be connected to your name. You can read more and register to participate in this study at this site: https://agronomy.unl.edu/crop-production-clinic-study-consent. Looking forward to seeing those who attend the upcoming CPC and NCMC!
As I work with producers and landlords, I’ve seen a variety of understanding and preparation for inputting information into the Texas A&M Farm Bill Decision Tool. Previous blog posts have shared screenshots for inputting information. What I will do with this blog post is share how to simplify the time spent inputting information while checking for accuracy of the information inputted. You will only receive as accurate of information as what you input into the tool!
Hopefully this post was helpful to you in understanding how to simplify your input into this tool, to understand the importance of accuracy, and to understand one way of analyzing data from the Texas A&M Decision tool! You can view more information by checking out these YouTube videos.
I’ve really enjoyed working with producers and landlords on looking at farm bill decisions for individual operations. A quick caution again regarding supplemental coverage option (SCO), you can only take price loss coverage (PLC) into account not PLC+SCO if you haven’t plugged the information into the Texas A&M farm bill tool correctly (meaning 10 years of yield data and all production information broken into crop insurance units for each FSA farm number). You can always discuss SCO with your crop insurance agent but the tool itself won’t provide correct output without inputting numbers correctly. You can simply remove SCO from the tool information by not selecting a crop insurance option on the first home screen of each farm unit you input into the Texas A&M tool. I have screen shots with additional information in this blog post.
I’m willing to work individually with those interested in looking at the Texas A&M tool for your decisions. Please call (402) 762-3644 to set up an appointment. You will need to bring the following with you:
- Your CC yields from FSA (the ones sent in July/August tend to have all your CC yields for all your current base acres). You could also request your FSA 156-EZ form for this information. Or better yet, ask for FSA’s eraser sheet for each of your farms.
- Your base acres and potential base reallocation information FSA sent you.
- Yield production history from 2008-2012 by crop. If you were in the ACRE program during the last farm bill, please also ask them for the screenshot of all your yield production history. Since you had to prove yields with that program, your production information is already in their system. If you weren’t in ACRE, you will need to fill out the price loss coverage form FSA sent you. You can obtain this information from your crop insurance records or from scale tickets by farm if you don’t have crop insurance information. You will not have to prove yields at the time of signing up, but please keep your records as you will need to prove how you obtained this information in the event you are spot-checked. Here’s more information regarding yields.
When determining your yield history from 2008-2012, for combined counties, FSA is looking for a total combined production (not a weighted production based on irrigated vs. dryland acres). If you have crop insurance information, add up the total production in bushels for irrigated and dryland by crop (ex. Corn) for each FSA farm number and total the acres of each production entry. Then divide production by total acres to determine your yield. It’s important you use RMA production data, not APH yield as the APH yield may incorporate other modifications to actual production.
For split counties, I’ve been recommending to keep dryland and irrigated production split on the top part of the FSA PLC form and then the combined yields at the bottom part of the form. This allows you to have the split yield information for the Farm Bill Decision Tool and also the combined yield data that FSA needs. Add up dryland production by FSA farm number and irrigated production by that farm number. When inputting data from a split county into the Texas A&M decision aid, you will need to allocate base acres on a percentage of the irrigated vs. dryland acres. For example, if 50% of the land in one FSA farm number is irrigated and you have 200 acres, then 100 acres would be used for the base acres in the decision tool for irrigated yields and 100 acres would be used in the tool for dryland yields. Your CC yield will remain the same for both irrigated and dryland by crop.
Last week was enjoyable working with farmers on Farm Bill decisions. I’ve decided to work with producers on an individual basis. If you are interested in help looking at your potential options using the Texas A&M model or would like another set of eyes to make sure the data was inputted correctly, please call (402) 762-3644 and Deanna or Holli will get you scheduled for a time.
One caveat is that this model is only as good as the data you input into it and your decisions
are based on where you feel potential prices the next five years will be. You need your CC yields and base acres from FSA as well as production history since at least 2008 (2003 if you wish to run crop insurance tool). Requesting a copy of the FSA “eraser sheet” is a great tool to check on planted and crop production planted acres and to see if reallocated base jives with the computer program. The Texas A&M simulation at https://usda.afpc.tamu.edu/ isn’t difficult to run, but it can be confusing as to what number to input where. Begin by registering at the site by providing an email address and password. Then login and you will see the following screen.
If you do not want to look at crop insurance decision but wish to consider the first three decisions, then for counties such as Clay County with COMBINED irrigated and dryland county yields, completing the Price Loss Coverage (PLC) Yield Worksheet (CCC-859) from FSA with your combined irrigated and dryland yields for each FSA number will greatly aid you in inputting the data. For counties with any splits in irrigated and dryland yields, I recommend placing irrigated and dryland production separately on the top of the PLC Yield worksheet, and then combining production by crop towards the bottom of the worksheet. Regardless of if your county has the opportunity for a split irrigated/non-irrigated payment, all CC yields in Nebraska are combined by crop (regardless of irrigation or not), so FSA will want a combined yield by crop on their form.
EACH crop needs to be entered as a separate farm unit. I have created a fake account to walk you through a simulation.
For entering separate crop insurance tracts, the CC yield should remain the same for all dryland tracts under one FSA farm number (same for irrigated). However, you will have to split out base acres amongst the tracts and you need to make sure the acres inputted add up; please double check this!
For your yield update and base reallocation information: For some of you, the base reallocation acres in the tool have been slightly different than what you received from FSA office. That may be because risk management agency (RMA) acres were used and were different than the production acres FSA had on file. You need to use the FSA acres for planted acres when using this model if they differ from the RMA ones.
When running this model, on many farms PLC + SCO looks favorable for some crops. A word of caution, you can consider PLC but should not consider SCO in your decision if you have not broken everything out into crop insurance tracts and included 10 years of production history into the tool. So in the decision of reallocating base acres or not, in the final summary section that gives you total numbers, anytime PLC+SCO is shown for a particular crop and you have not included the proper crop insurance info, you need to re-calculate the final total by hand using PLC ONLY from the table above that area. It normally doesn’t change the outcome that the decision tool provides, but it can. I’m not saying that SCO shouldn’t be considered, what I’m saying is that the numbers provided in the tool are not accurate if you have not inputted the data in the way needed to look at crop insurance decisions.
Some of you have questioned why PLC even lists a payment when prices are inputted higher than the benchmark price of $3.70 for corn, etc. The Texas A&M tool is giving you essentially a bell curve of 500 random outputs with the distribution of that curve around the particular price you input for each crop. So with every given price you input, there’s a certain probability that the price will be at, above, or below that particular price. That’s essentially what the red, green, yellow bars are showing you on the analysis. So you’re assessing where you feel prices will be, what decision will allow you to best sleep at night, the potential of spreading out risk with several farm numbers by choosing different options, etc. You can also view the YouTube videos from Texas A&M with more information!
Tis the season for winter programming! The following are a few upcoming meetings occurring this week. Winter program brochures were mailed a few weeks ago, so please check those for additional meetings. Looking forward to seeing you at upcoming meetings this winter! A reminder that if you plan to attend any of the upcoming Crop Production Clinics, that you need to register online by 3:00 p.m. the previous day of the clinic. Crop Production Clinics this week will be held in Kearney on Tuesday the 13th and at York on the 14th.
Farm & Ranch Business Succession & Estate Planning Workshops: This is a very important topic for farm families to consider! Two workshops will be held in our area; one in Blue Hill at the Community Center on January 13th and one in York at the Country Club on January 15th. The workshop will go from 9:00 a.m. to 2:30 p.m. There is no charge for the workshops, but you need to register by calling the Rural Response Hotline at 1-800-464-0258. Please register by January 10 for Blue Hill and January 12 for York.
The workshop is intended to be useful for established farm and ranch owners, for their successors, and for beginners. Topics include: the stages of succession planning, contribution & compensation, balancing the interests of on-farm and off-farm heirs; the importance of communication, setting goals, analyzing cash flow, and balancing intergenerational expectations and needs; beginning farmer loan and tax credit programs; the use of trusts, wills, life estate deeds and business entities (such as the limited liability company) in family estate and business succession planning; buy-sell agreements, asset protection, taxation (federal transfer taxes, Nebraska inheritance tax, basis adjustment), and essential estate documents. Presenters are Dave Goeller, Deputy Director, Northeast Center for Risk Management Education at UNL and Joe Hawbaker, Agricultural Law attorney from Omaha.
This workshop is made possible by the Nebraska Network for Beginning Farmers & Ranchers, the Farm and Ranch Project of Legal Aid of Nebraska, National Institute of Food and Agriculture, the Nebraska Department of Agriculture’s Farm Mediation, and the University of Nebraska Extension. More information can be found here.
Farm Bill Education Training January 14th: For those of you that would like to learn more about the Texas A&M Agricultural Food Policy Center comprehensive Farm Bill Decision Aid computer program, a hands-on training will be held Wednesday, January 14, 2015 at the new Nebraska Innovation Campus Conference Center, 2021 Transformation Drive in Lincoln, Nebraska. Workshop presenters will be Dr. James Richardson, Ag. Economist from Texas A&M and Dr. Brad Lubben, UNL Extension Ag. Economist. Dr. Richardson is the author of new, cutting edge, computer decision tool, endorsed by USDA. Those attending will learn how to use the Texas A&M Computer Decision Aid, how to interpret the results and how managing risk is integrated into the model. Participants are encouraged to bring their own iPad, tablet or laptop computer. For information about the workshop go to: http://bit.ly/1wh96bm. Participants need to pre-register at http://go.unl.edu/farmbill. The workshop will be from 9:00 a.m. to 4:00 p.m. with morning registration and refreshments available starting at 8:15 a.m. at the new NIC auditorium. There is a $30.00 registration fee which includes the noon meal, refreshments and meeting materials. Web links to the meeting can also be purchased by contacting the Saline County Extension Office at (402) 821-2151. For additional information about the farm bill go to: http://farmbill.unl.edu.
Next Heuermann Lecture will be Jan. 13th at 7:00 p.m. at Nebraska Innovation Campus (2021 Transformation Drive in Lincoln, Nebraska) on the topic of “Genetically Modified Animals: the Facts, the Fear Mongering, and the Future”. Presenter will be: Alison Van Eenennaam, University of California – Davis, 2014 Borlaug CAST Communication Awardee. For more information, go to: http://heuermannlectures.unl.edu/. If you cannot make it to Lincoln, you can watch it live via video at the website link.
The Cornhusker Economics Conference will focus on the ag outlook and management decisions for farmers and ranchers at Clay Center on February 29th at the Clay County Activities Building at the Clay County Fairgrounds. The program will run from 10:00 a.m.-2:30 p.m. with registration beginning at 9:30 a.m. The conference will cover key topics affecting farm management and production decisions for 2012. It is offered by UNL Extension and the UNL Department of Agricultural Economics and is sponsored in part by funding from the Nebraska Soybean Board.
Dan O’Brien of Kansas State University will share his insight on grain and oilseed outlook and risk management decisions in today’s uncertain markets. While market volatility shows the need for sound hedging strategies, concerns about futures market performance and the recent MF Global bankruptcy affecting hedge margin accounts raise questions about the best path ahead for managing market risk. O’Brien will bring his experience and analysis of futures market performance to bear on the issues and discuss implications for producer decisions.
Shane Ellis, livestock marketing specialist at Iowa State University, will discuss the outlook for livestock markets and producer profitability. With outlook for meat demand and continued reductions in cattle supplies, the market fundamentals look strong, but must weigh against grain supplies and feed prices. Ellis will bring his expertise to the situation and provide guidance for producer marketing and production decisions in 2012.
The land market has also been moving in the past year and UNL Extension Educator Allan Vyhnalek will use his local knowledge and analysis to discuss land markets and leasing arrangements with implications for producer decisions. The closing session will feature a focus on agricultural policy and the direction for new farm programs. Brad Lubben, policy specialist, will discuss the policy outlook in Washington and the major policy developments that could affect agriculture in 2011. Then, Lubben will team with UNL Extension educators to discuss specific directions for the new farm bill and implications for farm programs, conservation programs, and risk management decisions.
There is a $25 registration fee to cover programming expenses for speakers, materials, and the noon meal. Please RSVP to Jenny Rees at the Clay County Extension Office at (402) 762-3644 or firstname.lastname@example.org by Feb. 27 so we can obtain a meal count. Hope to see you at the excellent conference!